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Originally Posted by rcentros
Do you have proof that Amazon was "losing money" on $10 eBooks? Or is this an assumption?
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Why let lack of evidence get in the way of a zombie meme?
If the DOJ saying Amazon never lost money selling ebooks pre-conspiracy won't kill that brain eating zombie, nothing will. Some myths are too comforting to give up. Amazon *has* to be evil because admitting competitors misunderstood the market is too upsetting.
The meme simply refuses to accept that losing a buck or less on one item, for a limited time, increases its visibility and results in more sales than squeezing every customer ever for every last penny. (Even though BAEN's Flint proved it to the extreme years before Kindle even came out.) Or that applying the tactic sequentially to different products (as supermarkets and dept stores have done since the early 20th century) returns a much bigger profit on the whole by enticing customers to buy more things, immediately or on a return trip, at larger margins.
Modern marketing is simply incomprehensible to some people in Manhattan Publishing.
Quote:
Originally Posted by rcentros
My first choice "cheaper option" is now Overdrive — which is the topic of this thread. I don't know what the publishers make loaning books via Overdrive, but I'm guessing they would make more selling me copies at $10.
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They would.
But their priority isn't maximizing total profit but rather maximizing Reader Spend™, demonstrated by them making less money from Agency (70% of $13 = $9.11 versus the > $10 price Amazon was supposed to be taking a loss on) than out of wholesaling the books and letting Amazon pay for the privilege of promoting their books and increasing sales. (Consistency isn't their strong suit.)
But in their 19th century mindset, reducing the book and the author's visibility by keeping it out of libraries will force you to pay $13 because in their eyes there is no such thing as price elasticity or losing interest because of unavailability. They are absolutely certain ever reader who might be interested and who might potentially buy a book will eventually give in and pay their danegeld instead of doing without.
(Shrug)
It's soon to be a moot point anyway.
The BPHs combined market power is declining as the market continues to grow outside their grasp. They used to be 65% of the ebook market in 2010. It's been going down steadily ever since Agency took hold. They're down to a quarter and dropping fast by the last publicly available unit data, after Agency Part Deux.
Libraries have other sources of books to offer patrons.
They'll move on and Overdrive will help them.
Again, KKR didn't dump a ton of money on Overdrive to see it wither and die.